What Happens to My Assets in a Chapter 7 Bankruptcy?

Submitted by admin on Mon, 07/14/2014 - 13:42

Filing a Chapter 7 can seem like a difficult and dangerous task, especially to those who do have assets to their names. You might be worried about your home or your vehicle, or perhaps you are simply worried about heirlooms; without the requisite information, things like “liquidation of assets” might be enough to scare you away from filing. The truth, however, is that if you are in so much debt that you are considering affordable bankruptcy attorneys in Salt Lake City, your assets are most likely safe.

Property and Tools

Will you be able to keep your furniture, clothing, and bedding? What about artwork or inherited valuables? Fortunately, there are exemptions for these things, too. If your artwork depicts or was created by a family member, you can keep it. You can keep an amount of furniture less than or equal to $1000 in addition to your washer, refrigerator, and other necessary appliances. Excluding furs, you can keep clothing; books, pets, and musical instruments are also usually exempt. Inherited objects are also usually exempt, depending on their values. Compensation from personal injury or wrongful death suits are also exempt. Let’s not forget important trade tools and books; these, too, are exempt up to a total worth of $5000.

Homestead and Motor Vehicles

Homes and cars are arguably the most important assets, and losing these can be painful and difficult. Fortunately, there are certain protections in place which help ensure that the lives of individuals filing for bankruptcy are not ruined or totally compromised. If you cannot profit off of the sale of your home or vehicle, they are safe; your creditors would not profit off of the sale of your home or vehicle either. You can also probably qualify for exemptions, which help provide extra insurance against bankruptcy; these exemptions essentially state that if the equity of your home or the value of your vehicle is less than the amount of the exemption, these assets are safe.

Paychecks, Life Insurance, and Pensions

The point of filing for bankruptcy is to help you deal with your debt, not create new debt. The trustee cannot take the money you need to keep yourself and your family alive, so you can expect to keep enough of your wages to match the median income for your household size. If you are the beneficiary of a life insurance policy from a spouse or parent, it is very likely that you can keep the proceeds. Retirement accounts and IRAs are both exempt to a certain point, and if you rely on a pension, you will not be required to liquidate it.

Bankruptcy and Exemptions

Filing for bankruptcy is not meant to take everything away from you, and it is certainly not meant to make you miserable; it is simply a logical step in the process of debt relief and management. You should not be forced to choose between your life and your financial state. If you are still worried about losing your treasured or important assets in a Chapter 7 bankruptcy, you can schedule a free, no obligation consultation with BDJ Express Law today. If you have further questions about filing Utah Bankruptcy, please call us at 801-438-3520 for our Draper office bankruptcy consultation or 801-394-2336 for an Ogden office bankruptcy consultation. Don’t let your worries keep you from filing – Call us at BDJ Express Law today!